Alasdair Macleod: European Union won't survive without QE

 

 

 Democrates play the race card...Again...

Rep.: Race Is Delaying Debt Solution

Dem Gov. Accuses GOP of Trying to Hurt Economy

Head of Democratic Gov. Association says GOP is sabotaging debt talks to ensure Obama won't win re-election

• Rep.: Race Is Delaying Debt Solution

If anybody is trying to Hurt the Economy...it's obama...

If anybody is trying to hurt obamas re-election...it's obama...

A Brief History Of Obama's Fiscal Record

After working hard to compile a list of Obama's rather questionable record of fiscal promises and actual executions, the gist of which is represented best by the violent clash between myth and realty in Christina Romer's "The Job Impact of the American Recovery and Reinvestment Plan" whose epic failure is defined by one simple chart, we were disappointed to learn that Paul Ryan had already done this. And leaving Paul Ryan's politics aside, the facts do speak themselves. They speak even louder when one considers the din raised by the same president who back in 2006 said: "The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better." Indeed they do president Obama. Indeed they do. So without further ado...

Charting America's Brief Trip In And Out Of Austerity... And Onward To Complete Disaster 

One of the "positive" side-effects of the Treasury's plundering of retirement accounts is that total US debt in June actually declined for the first time since January 2010, dropping by $1.6 billion from the May 31 closing print of $14.344 trillion. No doubt this was predicated by the US Treasury officially breaching the debt ceiling on May 16. Yet due to this, or for some other reason (and it is not a surge in net income tax receipts as these appear to have reached an inflection point earlier in the year and are now trendlining lower on a Y/Y basis), something else happened: the slope on the cumulative deficit line since the start of the depression in December 2007 (see below), is now the shallowest it has ever been. In other words, the US over the past few months, faced with the threat and now reality of a debt ceiling breach was actively cutting spending, while benefitting from a transitory spike in income tax revenues, although unfortunately now that the unemployment rate is back on the trendline to double digits, this will be the only true transitory thing about the US economy. Whether this actual, factual fiscal prudence was conscious is unclear, however the result is clear: faced with the threat of being unable to finance every single dollar in perpetuity, the US government's involuntary self-imposed austerity actually... Worked! And yes, the direct side effect is that Q2 GDP is now likely to come at 1.6%: the worst quarterly increase since... Q2 of 2010 (recall that 2010 Q2 GDP was revised from 2.4% to 1.6$ on August 27 last year... hours before Bernanke announced QE2 ). And there once again is the glaring correlation between the slowing of the economy and the decline in debt issuance, and the actual deficit "improvement." Now take this slower deficit growth, and assume it actually is reversed, i.e., America has a budget surplus. While great for the country in the Long-Run, it would mean that GDP, which is now purely reliant on how much debt Geithner can issue, it would mean a collapse in the GDP, in the S&P, and in Wall Street executives' bank accounts. At least in the absence of QE3, 4 and so forth...

A Visual Representation Of MurdochGate's Toxic Spiderweb 

For those who think the News Corp. fallout is anywhere near close to ending, we have one word: Nope. The chart below from BusinessWeek is the best visual representation of what started as a simple voicemail tapping scandal and is set to not only topple a media empire, but to revolutionize the tabloid industry (for once into something better we hope), in the process maybe even returning a few IQ points to the average "developed nation" citizen. 

In The News Today

July 16, 2011, at 3:32 pm
by Jim Sinclair Jim Sinclair’s Commentary

The Chicken Spa, a key item for self sufficiency.






Jim Sinclair’s Commentary

Five so far this weekend.

Regulators Close Four Banks & One Questionable Credit Union
Jul 15, 2011 – 11:49 PM by Ken – Bank Deals Guy
Four small banks were closed by regulators this Friday, and on Monday the NCUA liquidated a small and bizarre credit union. That raises the number of 2011 bank failures to 55 and the number of 2011 credit union failures to 12. Last year at this time there had been 96 bank failures and 10 credit union liquidations.
Georgia added to its lead as the state with the most bank failures this year. Two of the four bank failures were in Georgia which brings the total number of 2011 Georgia bank failures to 16. The third bank failure today was in Florida. Last year Florida had the most bank failures, but this year, it’s far behind Georgia with only 7 failures. The last closure today was in Arizona.
The FDIC arranged for other banks to assume all deposits of the four failed banks. The only exception was some brokered deposits.
The most interesting closure this week was the NCUA’s liquidation of Vensure Federal Credit Union. The NCUA placed this credit union into conservatorship on April 15th, and soon after that news came out about its involvement with internet gambling. According to this Credit Union Journal:
Vensure is on pace to earn $4 million this year handling poker bets for its largest depositor Trinity Global Commerce, which processes bets for the two biggest online poker sites, PokerStars.com and FullTiltPoker.com. With no loans on its books, that amounts to 99% of its income.
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Jim Sinclair’s Commentary

QE to infinity via creative tangential accounting.

U.S. Fed balance sheet hits record size
Fri Jul 15, 2011 2:00am IST
NEW YORK, July 14 (Reuters) – The U.S. Federal Reserve’s balance sheet grew to a record size in the week ended July 13 as the central bank bought more bonds in an attempt to support a fragile recovery, Fed data released on Thursday showed.
The central bank’s $600 billion Treasury-buying scheme, known as QE2, ended on June 30. It now has to buy Treasuries under a program using the proceeds from maturing agency bonds and mortgage-backed securities.
The Fed’s balance sheet — a broad gauge of its lending to the financial system — rose to $2.862 trillion in the week ended July 13 from $2.853 trillion in the week ended July 6.
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